Some investors are capitalizing on the China stock dips in big ways as companies such as Alibaba see increased inflows at value prices. Despite, or perhaps because of dropping prices, inflows are pouring into the Chinese tech sector in record numbers.
The KraneShares CSI China Internet ETF (KWEB) is the only ETF with pureplay exposure to the Chinese software and information technology stocks and has taken a huge hit in price with regulatory crackdowns driving the sector’s valuation down. Investors show their confidence in the space, though, and seize the opportunity to buy KWEB in massive volumes.
“We see investors buying the dip,” Brendan Ahern, CIO of KraneShares, told ETF Trends. “You can argue that despite new regulation, the fundamentals of the companies have never been stronger.”
KWEB is up 9% today after hitting its lowest point yesterday, down nearly 38% year-to-date. Inflows have been meteoric, however, with the 30-day average daily volume for the month up 139.6% as of close yesterday at roughly 300 million for the month so far.
KWEB’s volume is up 370.2% for the year, with money continuing to pour into the ETF as of print. This might be the biggest buy-the-dip the markets have seen in a while.
The KraneShares CSI China Internet ETF (KWEB) tracks the CSI Overseas China Internet Index and measures the performance of publicly traded companies outside of mainland China that operate within China’s internet and internet-related sectors.
This includes companies that develop and market internet software and services, provide retail or commercial services via the internet, develop and market mobile software, and manufacture entertainment and educational software for home use.
KWEB provides exposure to the Chinese internet equivalents of Google, Facebook, Amazon, eBay, and the like, all companies that benefit from a growing user base within China, as well as a growing middle class.
Its top holdings include Tencent, at 10.9%, Alibaba (BABA), at 10.87%; and JD.com, at 7.26%.
The ETF has an annual expense ratio of 0.73%.
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